STAFF REPORT
City of Lancaster
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3/26/2024
JC
Date: March 26, 2024
To: Mayor Parris and City Council Members
From: Trolis Niebla, Assistant City Manager
Allison Burns, City Attorney
George Harris, Director of Finance/IT
Subject:Approve a Joint Use and Irrevocable License Agreement with the Antelope Valley Fairgrounds Authority for the Construction and Use of the Multi- Agency Regional Resiliency Center (MARRC)
Recommendations:
1. Approve a Joint Use and Irrevocable License Agreement with the Antelope Valley Fairgrounds Authority for the Construction and Use of the Multi-Agency Regional Resiliency Center (MARRC)
2. Authorize the City Manager to execute the Joint Use and Irrevocable License Agreement with the Antelope Valley Fairgrounds Authority and the contribution of construction costs to support the project for an additional not to exceed amount of $50 million, contingent on the successful issuance of Lancaster Finance Authority Lease Revenue Bonds and other identified contingencies set forth in the Joint Use and Irrevocable License Agreement Fiscal Impact:
Upon the issuance of Lease Revenue bonds by the Lancaster Finance Authority and the satisfaction of other identified contingencies set forth in the Joint Use and Irrevocable License Agreement, the City will provide an additional amount not-to-exceed $50 Million towards the construction of the MARRC. The City has an existing agreement to contribute a total of $6.5 Million to fund conceptual design, and all final architectural and engineering design work needed to complete the project. The final annual obligation of debt service of the Lease Revenue Bonds will be the responsibility of the City. The annual amount of the debt service is to be determined based on the calculation of final issuance costs and finance rates and terms (currently estimated to be between $3-$4 Million). Subsequent Council actions will be presented as required to issue the Lease Revenue Bonds.
Background:
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In 2021, the City of Lancaster began evaluating sites best suited for the Event Center and Regional Evacuation Center. The existing 135-acre Antelope Valley Fairgrounds is uniquely setup for expansion, and already offers heating, cooling, and some protection from the elements (for humans and livestock); large-scale parking accommodations, on-site maintenance facility with equipment, and sufficient infrastructure for electrical, water, broadband, Wi-Fi, full on-site hook-ups for RV’s and office trailers, existing restrooms and showers adjacent; helipad, four (4) onsite kitchen facilities, refrigerated storage, and the framework for its own micro-grid. The Fairgrounds is also a fenced and secured facility with controlled access points. It is an ideal location for sheltering and the only place in the AV suitable to accommodate large quantities of people. The facility is currently set-up 365 days a year as a large animal evacuation center and currently is in use multiple times a year. Identified as the Multi-Agency Regional Resiliency Center, or MARRC, the location will support the development of a fully functioning, large scale, off the grid, resilient, emergency and incident support campus at the Antelope Valley Fairgrounds, AV Fair and Event Center.
In February 2022, the City of Lancaster entered into a Memorandum of Understanding (MOU) with the Antelope Valley Fair Authority (AV Fair Authority) to loan funds to the project; concurrently, the AV Fair Authority executed an Individual Project Agreement (IPA) with the California Construction Authority (CCA) for Project Management and Design services. The City of Lancaster has committed over $6.5 Million for design of the project.
The CCA has completed a facility needs assessment, 100% conceptual design, added a second building to house the Emergency Operations Center & Assembly Hall, and awarded a contract for final design and the preparation of Construction Documents. Currently, CCA is approaching completion of the final design and advertising the Request for Bids will begin this month.
Final design and permitting are expected to be complete in early 2024 with construction completed and move-in in Fall 2025. Construction is estimated at approximately $90 Million.
To cover these costs, the City of Lancaster, the Authority, Antelope Valley Union High School District (AVUSD), City of Palmdale (Palmdale), County of Los Angeles, and the State of California Department of Food and Agriculture (CDFA) are partnering to pool resources to get the MARRC built and operational. Other agencies have showed interest in assisting with the costs as well.
In June 2023, the Antelope Valley Fair Authority received a $20.5 million grant from the California Department of Food and Agriculture (CDFA) Fairs and Expositions Branch for MARRC improvements. On November 2, 2023 Palmdale and the Antelope Valley Fairgrounds Authority entered into an agreement whereby Palmdale committed to contribute a total of $10 Million to the project. Formal actions are pending regarding the County of Los Angeles and other agencies. It is expected that an additional $10-$30 Million will be contributed by other agencies.
Analysis:
With the assistance of the other participating agencies, the remaining contribution to the project from the City of Lancaster is set at a not-to-exceed amount of $50 Million. The source of the funds is a proposed Lease Revenue Bond financing issued by the Lancaster Financing Authority, with the source of the debt service payments being a general obligation of the City of Lancaster General Fund. The issuance of the Lease Revenue Bonds is targeted to take place in the July 2024 timeframe, making funds available for construction to begin in August 2024. 1 5
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Attached is the proposed Joint Use and Irrevocable License Agreement by and between the City of Lancaster and the Antelope Valley Fairgrounds Authority, which outlines the terms of the use agreement for the City of Lancaster (City) resulting from its investment in the project. As outlined in the agreement, the City’s contribution is contingent on a number of items to include but not limited to: the issuance of the Lease Revenue Bonds, and the Authority’s ability to raise all funds required to fully construct the project.
The remaining timeline includes Council adoption of the Lease Revenue Bonds documents, which is expected to be presented in June 2024.
Attachment:
Joint Use and Irrevocable License Agreement by and between the City of Lancaster and the Antelope Valley Fairgrounds Authority